The role of measurement theory in supporting the objectives of the financial statements

Abstract

This study emphasises the fact that the objectives of the financial statements are not compatible with the principles that establish measurement in the social sciences, and that they therefore cannot be considered to be measurement objectives. The concept of measurement presupposes the comprehension of the principal state and consequently the objectives of a measurement discipline only make measurement sense in the presence of a theory of measurement in which they are contained. Currently, accounting is considered to be a measurement discipline with complete measurement objectives, even in the absence of a measurement theory that incorporates the objectives of the measurement process. In this study the principles of the representational theory of measurement (a theory that establishes measurement in the social sciences) are used to emphasise that the objectives of the financial statements are not measurement objectives unless they are supported by a theory of measurement. Hence the financial statements cannot contain measurement information until a theory of measurement is established that incorporates the objectives of the accounting measurement processes.